Warren Buffett, the US billionaire buying a $5bn stake in Goldman Sachs, has said recent economic turmoil "will look like nirvana" if senators do not approve a $700bn bail-out plan soon.

By Rowena Mason

3:57PM BST 24 Sep 2008

Mr Buffett, one of the world's richest men, compared current economic threats to Pearl Harbor, urging the US Government to approve a $700bn mortgage bail-out fund to avoid further catastrophe.

Warren Buffett holds all the cards

"I'm sure we didn't want to go to war in 1941," he said in an interview with news channel CNBC. "There are times when events force a timetable on you and force action. If they think about it for three weeks, it will be very different and more difficult."

Mr Buffett threw his weight behind the plan devised by Treasury Secretary Hank Paulson, as the world awaits a decision from US senators over whether the government should spend $700bn buying up bad mortgage-related assets.

"The Paulson Plan is absolutely necessary to avoid going over the precipice," he said. "The market couldn't have taken another week like the one that was developing. It's the last thing that Hank Paulson wanted to do but there's no plan B."

The financial heavyweight, known as the Sage of Omaha for his shrewd investments, said he would not have bought his stake in Goldman Sachs if he was not confident the bail-out plan would work.

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"If I didn't think the government was going to act, I wouldn't be doing anything this week," he said. "If would be a mistake if the government was going to walk away - there's no telling what would happen."

He warned that last week the country was "very close to a system that was totally dysfunctional" that would have taken years to repair without action from the Treasury and the Federal Reserve.